The prompt states regarding a smart city the following two things that are relevant to the question.

A smart city use technology to ensure the safety and security of the city.

Critics argue that that use of technology will lead to a surveillance state.

The prompt does NOT say, however, that smart cities use technology for surveillance, and the nature and use of the technology being discussed are not made clear.

(i) That smart cities lead to surveillance states is described as the opinion of some, the critics, rather than stated as fact. So that smart cities encourage the formation of surveillance states cannot be inferred.

(ii) It's not clear that the technology discussed in the prompt is actually used for surveillance.

(iii) It's not clear that the technology discussed in the prompt is used for surveillance, and no connection is made between sustainability and surveillance.

(iv) This matches the prompt, in that the prompt says that critics argue that the use of technology to ensure safety and security will lead to a surveillance state, and one can reasonably infer that what those critics say matches what they perceive.

So statement (iv) is the only one that can be inferred.

The correct answer is C.

(Note: A good hack can be useful. I was not 100% sure about some of the statements, but I was sure that (i) cannot be inferred and that (iv) can. So to confirm that I was on the right track I looked for answer choices that did not include (i) and did include (iv). That left me with only answer choice C.)